One of China's largest social networking companies, Oak Pacific Interactive, has hired investment banks for an initial public offering in the United States in the first half of next year, sources close to the matter told Reuters on Friday.
Oak Pacific Interactive (OPI), owns Renren, China's largest online social networking site, Nuomi, a website featuring daily deals, and online community Mop.
Two successful IPOs in the U.S. by Chinese technology companies have prompted others to follow suit, aiming to list in a market with the potential for higher valuations.
TaoMee, a social networking site for children, was also planning to list late next year and would conduct its beauty parade for investment banks in the first quarter of 2011, said a source familiar with the situation.
Both companies will be following in the footsteps of online video site operator Youku.com Inc and online retailer E-Commerce China Dangdang Inc, which saw their stocks soar on this week's debuts.
Youku's triple-digit first-day pop was the biggest since 2005, when Baidu Inc rose 354 percent, according to data from the New York Stock Exchange.
Oak Pacific Interactive had hired Credit Suisse Group AG and Deutsche Bank AG to underwrite the IPO, the sources said. The banks declined to comment.
They selected bankers a couple of months ago and are looking at a first-half 2011 listing, said one sources, declining to be named as the information was not yet public.
Another source said the amount to be raised had not been finalized.
Oak Pacific declined to comment.
Social networking sites such as Renren and Kaixin001, which operate like Facebook, have grown in popularity in China in recent years, garnering most of their revenue from online advertising. They also benefit from an ecosystem closed to major foreign competition. Facebook and Twitter are banned in China.
In 2008, Oak Pacific, led by charismatic Chief Executive Joe Chen, announced that it had received $430 million in private funding.
China is the world's largest Internet market by users at 420 million. About half of them use social networking sites, according to government data.
(Reporting by Melanie Lee; Editing by Chris Lewis)